The upcoming Budget is an apt opportunity to catapult demand in the power sector to move closer to the cherished dream of 24X7 power for all. The Goods and Service Tax (GST) must be rolled out at the earliest and all other state taxations, including Electricity Duty (ED) on consumption or production of power, should be subsumed under GST. This will ensure uniformity in taxation on consumption of power and will ultimately reduce the power prices, which will be beneficial to all consumers.
There is an urgent need to revitalize the discoms, which can drastically improve the power demand position in the country and roll out measures to increase India’s per capita power consumption.
Renewable power: The solar industry has started gaining momentum and it is imperative that all the existing incentives and financial support should continue. While early implementation of GST is desirable to ensure a uniform tax structure, capital goods and services used for setting up renewable energy projects should be exempted from GST to support the growth momentum in solar.
Further, while the RBI has included renewable energy sector within the priority sector lending, the loan limit of Rs 15 crore per borrower and Rs 10 lakh per household needs to be enhanced to include bigger projects. Also, the increase of Clean Energy Cess to Rs 400 per MT is a major burden which will weaken the competitiveness of the power sector. This should be suitably reduced or CENVAT credit must be given to negate the effect of increase in coal prices and ultimately the landed cost of power.